It is a further sign that the economy is shrugging off the effects of the third-coldest winter on record, which affected economic activity.
Retailers said sales were up 1.1% last month, the biggest rise since September 2012 and beating analysts' forecasts.
In addition, sales growth in February was revised up to 0.7% from an initial estimate of 0,3%.
Retail sales totalled $433.9bn (£259bn) in March, 3.8% higher than March 2013.
"Rising wealth, shrinking debt burdens and improving labour markets are helping American shoppers shake off the winter blahs," said Sal Guatieri, economist at BMO Capital Markets.
Retail sales had fallen in January and December.
Widespread gainsThe US Commerce Department figures showed that retail sales had risen in almost all categories last month.
Sales at general merchandise stores such as Wal-Mart, Target and department stores, rose by 1.9%, their strongest one-month gain since March 2007.
Sales of cars and spare parts rose by 3.1%. while sales at building materials and garden equipment stores rose 1.8% .
However, sales at electronics and appliance stores fell 1.6% and there were also falls in sales at petrol stations, down 1.3%.
Excluding petrol sales, overall retail sales in March were up 1.4%, which was their biggest rise in four years.
Jobs recoveryIn March, US employers added 192,000 jobs, which was just below February's gain of 197,000 jobs.
March also saw the US economy reach a key milestone - when the total number of private sector jobs created since the recession overtook the number that had been lost during the downturn.
Private businesses shed 8.8 million jobs during the 2007-2009 economic downturn. With the March gains, they have now hired 8.9 million workers.
Some economists believe the stronger economy will lift average monthly job gains to about 225,000.